Jordan fined for breach of ethics

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MICHAEL JORDAN, the flamboyant doyen of the insolvency business, was last night found guilty of breaking the ethics rules of the Institute of Chartered Accountants, writes Roger Trapp.

Along with Richard Stone, his fellow administrator of Polly Peck International, he was reprimanded and fined pounds 1,000.

The institute's disciplinary committee decided that Mr Jordan, senior partner of Cork Gully, Britain's best-known insolvency practice, and Mr Stone, a partner with Coopers & Lybrand, which incorporates Cork Gully, had failed to comply with the institute's by-laws by accepting the Polly Peck appointment in October 1990, when their firm had a potential conflict of interest.

Coopers & Lybrand advised Polly Peck and its former chief executive, Asil Nadir, on tax matters.

However, the three-member tribunal decided against the more serious sanctions of expulsion from the institute and loss of practising licences. It said: 'In our view, quite rightly, the investigation committee (which brought the case) have not sought to suggest that either of you intentionally failed to ascertain your firm's prior connections with PPI or that there should be any criticism of how you have conducted your administration.'

No further comment will be made by the firm or the institute pending consideration of an appeal.

Mr Jordan and Mr Stone have defended the charges vigorously, claiming that they had no case to answer. They have 28 days in which to decide whether to apply to another three-member tribunal, which would include two former judges of the Court of Appeal, for a reversal of the decision.

The case, which was subject to repeated delays, has been followed closely by accountants and other professionals, partly because Mr Jordan and Mr Stone are two of the country's most high-profile accountants, familiar figures outside their field as well as in it, but also because of the possible widespread ramifications.

In particular, the case highlights the potential conflict of interest problems faced by Coopers and other big six accountancy firms that employ hundreds of insolvency experts, auditors and accountants and also act as management consultants.

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